Coronavirus – Bounce Back Loans – BBLS
Having received some criticism for the CBILS scheme the Government have launched the Bounce Back Loan Scheme for small businesses.
The BBLS offers a 6 year loan with an interest rate of 2.5% for the term, and importantly, for the first 12 months there are no repayments to be made and the Government are paying the interest for this period as well, so effectively it’s interest and repayment free for 12 months.
After 12 months the repayments commence over the next 5 years (so total term 6 years) and interest runs. BBLS loans may be repaid early without penalty.
A business can borrow between £2,000 and £50,000 under the scheme, capped at 25% of turnover, so a business with a turnover of £40,000 could only borrow up to £10,000.
BBLS loans do not require a personal guarantee but the business should not have been in financial difficulty as at 31st December 2019. Remember this is a loan not a grant, it needs to be repaid.
The purpose of the BBLS is to provide additional working capital to help the business reopen and get back to normal, or as the scheme puts it, to bounce back.